Treasury Today Country Profiles in association with Citi

Tackling the gender pay gap

Toy figurines of man and woman on top of coins

In 2016, the gender pay gap for full-time employees in the UK was 9.4%. It was 17.4% in 1997. The new gender pay gap reporting regime aims to close the gap further.

By April 2018, all UK organisations with 250 or more employees must have published their gender pay gap-related figures.

As part of Gender Pay Gap Reporting, which came into force in April 2017, every organisation from the public, private and voluntary sectors will have to calculate and submit gender pay gap and gender bonus gap figures annually.

These organisations will also need to publish calculations for the proportion of men and women receiving bonuses, and the proportion of men and women in each quartile of the organisation’s pay structure.

An appropriately senior person, such as a chief executive, will then be required to sign-off the figures.

An aggregate view

The regulation only requires organisations to use aggregate data about their employees to calculate potential gender pay gaps, explains the HR professional body, CIPD.

Because reporting does not require measurement of the differences in individual earnings, gender pay gap figures will not reveal the differences between men and women who carry out the same jobs or work of equal value.

But according to the Advisory, Conciliation and Arbitration Service (ACAS), by giving figures for pay groups in this way, gender pay gap figures can help identify wider gender-related angles on matters such as recruitment, promotion, flexible working and family friendly practices.

An organisation employing more men in high-paid roles could, for example, suggest the existence of a glass ceiling for women.

Motivation for change

Being forced to publish pay gap statistics “will create many queries from various interested parties, such as the media, customers or employees”, says CIPD in its guidance. Reporting organisations may opt to include an explanation of any gaps. They may also draw attention to any action they propose to take to address those gaps and highlight any successful action already taken.

However, perceived discrepancies will almost certainly carry a negative PR value. The toxicity of bad press could eventually extend to loss of contracts and an inability to attract the best talent, suggests ACAS. Gender pay gap reporting should therefore help enforce organisational accountability for closing the gender pay gap.

But organisations stand to benefit too. Eradicating the full-time gender pay gap would, according to UK government estimates, contribute additional spending into the economy of £41bn each year.

Furthermore, organisations taking a responsible approach to the promotion of gender equality will enhance their public perception and, with it, the ability to attract and retain the best people.

What can you do if you think you are not receiving equal pay?

ACAS advises that anyone believing they are not receiving equal pay can write to their employer asking for information that will help them establish whether there is a pay difference and, if so, the reasons for the difference.

Its guidance on raising the issue suggests:

  • Identifying who your ‘comparators’ are – those you believe are receiving better terms and conditions than you.

  • Explaining why you think the comparators are doing equal work to yours.

  • Asking how pay is determined and what in the comparators’ job descriptions could explain any difference in pay.

Where a gender-based pay gap is confirmed, it suggests first finding a resolution through mediation or arbitration with ACAS.

However, as a last resort, a formal grievance can be raised. A claim can be brought before the Employment Tribunal under the Equality Act 2010.

If you take your claim to tribunal, ACAS must be informed. Claims usually have to be made within three months of your employment ending or the problem arising.

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